5 Class Hours

Instructor: Christopher Nelson

The investment portfolio is a critical component of a bank’s balance sheet management, serving as both a source of earnings and a risk management tool.  It can help a community bank achieve its financial and strategic objectives, meet liquidity needs, and help manage interest rate, credit, and capital risk.

This class will introduce students to fundamental investment concepts that drive the investment portfolio and explore common fixed-income investments used in community bank portfolios.  Students will learn about the risks and characteristics of these investments and examine the role of the investment portfolio in contributing to bank balance sheet performance from a risk/reward perspective.

Learning Objectives

Upon completion of this class, students will be able to:

  • Understand key concepts and terms involved with managing the bank investment portfolio and their application.
  • Identify the fundamental characteristics, benefits, and risks of fixed-income securities, including:
  • Government bonds
  • Mortgage-backed securities
  • Municipal bonds
  • Explain how different fixed-income securities fit within an institution’s investment strategy, given a set of investment objectives and risk parameters.
  • Understand how the investment portfolio can contribute to a bank’s financial performance.
  • Evaluate how an investment portfolio can be used to mitigate balance sheet risk exposures.


Who Should Attend?

This course is designed for community bankers who need a foundational understanding of the bank investment portfolio.  It is particularly suited for those who are newer to their roles or less familiar with the workings of the portfolio, such as loan officers, compliance officers, and accounting staff. The class is also beneficial for individuals involved in ALCO, management, or board meetings.


Annual School Session

Second Year Elective

Competency: Financial Management & Strategy